The court-ordered ceding of a 57-acre parcel of Lake Elmo land to Stillwater Township after a development dispute that began in late 2010 might represent a case of bad timing, at least from Lake Elmo's perspective.

The Minnesota Court of Appeals earlier this month found that there was no legal reason, despite the city's arguments to the contrary, to deny the request to shift the four parcels of land involving three owners from the city to the township.

The ruling frees the land, near the busy junction of Hwy. 36 and Manning Avenue and near the intersection of Hwy. 5, from Lake Elmo's zoning regulations.

The land was zoned as agricultural. When the owners sought to have it rezoned, making it more attractive to developers, they were rebuffed — and not diplomatically so, said Bernard Nass, who with his wife owns about half the land in two parcels and has been counting on its sale to support their retirement.

"I gave Lake Elmo a $1,000 application fee to have it rezoned," he said. "The City Council turned it down after about 15 minutes and kept the fee. I was never treated so rudely in all my life."

The landowners were told, " 'You might own it, but we zone it,' " he said.

Lake Elmo has garnered an image for bucking development, for trying to hold out as a rural island amid a sea of suburban subdivisions. Dean Zuleger, the city's new administrator, said it's clear the ruling reflects that reputation.

"But that day has changed," he said.

Zuleger and Mayor Mike Pearson, elected last fall after serving on the City Council for two years, said the landowners now likely would have gotten a different reception as the city — backed by a new administration and decisionmakers — shifts its philosophy to strike a more balanced approach.

As one example, Pearson cited plans for a development of 317 single- and multli-family housing units near Interstate 94 between Keats and Inwood Avenues and near Lake Elmo Park Reserve. Construction likely will start this fall.

"It is too bad," Pearson said of the ruling. "I can't speak to the past, I can only speak to the last two years, and now I think the mind-set has changed."

Thomas Bidon, who owns a smaller piece of the disputed land, served a short stint on the city's Planning Commission, in part out of frustration over its unbending policy. He also sees a change. "Now they are looking for businesses," he said.

The city, despite setbacks in District Court, before an administrative law judge and now at the Court of Appeals, is considering its next step. If the matter isn't dropped, that would leave a state Supreme Court appeal.

"As it stands, the land is now under a different jurisdiction," Pearson said. "I hope the ship didn't sail, but it might have."

Pearson and Zuleger said the city's case was sound, and the decision was as puzzling as it was disappointing. Pearson said the township's restrictions on the land are even tighter than the city's.

But it's not clear whether Stillwater Township is the land's final destination.

The tract is not far from Stillwater Area High School, a prime spot for potential development, where Lake Elmo, Oak Park Heights and an odd corner of Stillwater Township that will soon become part of the city of Stillwater also converge.

Stillwater Township took no position on the detachment, according to the ruling. And in any case, Nass said, it would be extremely costly to connect the city's sewer across Hwy 36. In Oak Park Heights, however, that connection would be easily made, he added.

The case is unusual in that, more typically, a city will annex land in an adjoining township as part of its growth plans.

In this instance, however, the landowners involved got together and asked that their property be detached from Lake Elmo to become part of Stillwater Township. It is developed to the east and north, and serves as a buffer to other Lake Elmo landowners, which the city must also consider, Pearson said.

But the land is ideally suited for commercial/industrial development rather than the rural residential plan envisioned by the city, Nass said. That's because it's crossed by a power line, is close to Hwy. 36 and the soil is gravelly. Nass has had this land on the market for three years, but buyers have shied away because of its agricultural zoning.

"We're not developers, we're just landowners," he said. "We've been there 35 years. It's been our home."

Nass is optimistic that, after the delay, the new jurisdiction will make the land more attractive.

"The whole thing that's going to help us is the bridge, all the hype about the bridge," he said, referring to waves of new traffic on Hwy. 36 expected after the new St. Croix Crossing, now under construction, opens in late 2016. "It's finally moving."